Report Offers Insight into Louisiana’s Offshore Wind Revenue Potential
The initial lease will result in $860,000 in investments for workforce training and has the potential to power nearly 435,400 homes with clean, renewable energy
NEW ORLEANS (Oct. 18, 2023) — During today’s Coastal Protection and Restoration Authority (CPRA) board meeting, researchers released a new report examining the growth potential for wind in the Gulf of Mexico, including estimates of revenue from federal offshore wind lease bids, rents and operating fees. The report, “Winds of Change: Navigating the Gulf of Mexico’s New Energy Frontier,” was created by the Kathleen Babineaux Blanco Public Policy Center at the University of Louisiana at Lafayette and commissioned by Restore the Mississippi River Delta and the Greater Lafourche Port Commission, also known as Port Fourchon. On Aug. 29, 2023, the Department of the Interior held the first-ever offshore wind energy auction for the Gulf of Mexico, resulting in RWE Offshore US Gulf, LLC winning the right to develop a wind farm in the 102,480-acre area offshore Lake Charles with their $5.6 million bid. This area has the potential to generate approximately 1.24 gigawatts of offshore wind energy capacity and power nearly 435,400 homes with clean, renewable energy in the state of Louisiana. Credits included in the bid will result in over $860,000 in investments for workforce training and domestic supply chain and $430,000 for fisheries compensatory mitigation.
In addition to revenues from the initial lease sale, annual rental fees (of $3/acre) and operating fees will be collected by the U.S. Treasury and could be shared with Louisiana, if the Reinvesting in Shoreline Economies and Ecosystems (RISEE) Act is passed. Alternatively, if Congress passed the Budgeting for Renewable Electrical Energy Zone Earnings (BREEZE) Act, the revenue from future offshore wind lease sales could be given to the adjacent state.
In both cases, the shared revenues will be put toward eligible uses already established by law, including ecosystem restoration, conservation, hurricane protection, investments in wildlife and fisheries resources, and infrastructure directly affected by coastal wetland loss. Louisiana could further dedicate wind revenue funds to coastal and restoration projects akin to the Gulf of Mexico Energy Security (GOMESA) Act, through which federal revenues from oil and gas leases in the Gulf of Mexico are dedicated to the constitutionally protected Coastal Trust Fund and allocated to nearby state and local governments, if pending legislation expands the limits of GOMESA to include wind revenues.
The Gulf of Mexico has long played a central role in energy production for the United States. The development of wind energy in the Gulf of Mexico has the potential to leverage Louisiana’s existing workforce and strengths in offshore development, diversify the region’s energy mix, reduce greenhouse gas emissions and provide a new source of coastal revenue.
In support of the revenue potential of offshore wind energy are partner organizations Restore the Mississippi River Delta, the University of Louisiana at Lafayette Kathleen Babineaux Blanco Public Policy Center, the Coastal Protection and Restoration Authority and Greater Lafourche Port Commission. The groups released the following statements following today’s significant release of report findings:
“This is a historic time for Louisiana,” said Simone Maloz, campaign director of Restore the Mississippi River Delta. “We are making more progress than ever before in restoring and protecting our coast, but it will take significant funding to continue with this momentum. The potential revenues generated by wind off our coast could provide funding for coastal infrastructure and resiliency to protect vulnerable communities and businesses most impacted by our changing coast.”
“Wind offers an exciting opportunity for developing new energy resources in the Gulf of Mexico,” said Dr. Stephen Barnes, director and associate professor of economics for the Kathleen Blanco Public Policy Center. “The robust offshore workforce, shallower waters and established marine industry provide valuable support for development of Gulf of Mexico wind projects.”
“We are excited about the future potential of wind for Louisiana which will utilize our state’s existing energy workforce and world-class supply chain to bring offshore wind into a new market,” said Chett Chiasson, executive director of the Greater Lafourche Port Commission. “As leaders of our working coast, we want to see reinvestment into protecting and restoring our communities.”
“We work daily to implement purposeful projects to restore and protect our coast, and we want to ensure that every available dollar is dedicated to advancing our science-backed plan,” said Bren Haase, executive director of CPRA. “We are grateful for the diverse group of coastal champions that are a part of the Sharing Offshore Revenues from Energy Sources (SHORES) Coalition who have helped advocate at the federal level for the dedication of this funding.”
“The bid per acre of this lease sale in the Gulf of Mexico is very similar to the first lease sale in North Carolina (Kitty Hawk in 2017),” said Dr. Anna Osland, director of research for the Kathleen Blanco Public Policy Center. “It establishes the first offshore wind development opportunity in the Gulf of Mexico and moves us one step closer toward creating offshore wind energy in the region.”
To read the policy research brief “Winds of Change: Navigating the Gulf of Mexico’s New Energy Frontier” click HERE. To read the full report “Offshore Wind in the Gulf of Mexico: Natural Resource Revenue Potential” click HERE.
Media contact:
Annie Matherne
(504) 650-5539
annie@gambelpr.com
About Restore the Mississippi River Delta
Restore the Mississippi River Delta is working to protect people, wildlife and jobs by reconnecting the river with its wetlands. As our region faces the crisis of land loss, we offer science-based solutions through a comprehensive approach to restoration. Composed of conservation, policy, science and outreach experts from Environmental Defense Fund, National Audubon Society, the National Wildlife Federation, Coalition to Restore Coastal Louisiana and Pontchartrain Conservancy, we are located in New Orleans and Baton Rouge, Louisiana; Washington, D.C.; and around the United States. Learn more at MississippiRiverDelta.org and connect with us on Facebook and Twitter.